Merrill Lynch Equities Australia Ltd PowerTel Limited Investor Presentation September 2000

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Merrill Lynch (Equities) Australia Ltd PowerTel
Limited Investor PresentationSeptember 2000
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AGENDA

• PowerTel Financial Report
• R.Shane Allan, Chief Financial Officer
• PowerTel Strategic Overview
• Neil Verrall, Director, Sales Marketing
• PowerTel Technical Differentiators
• Ron Sinnes, Director, Engineering

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POWERTEL FINANCIAL REPORTR. Shane Allan, CFO,
PowerTel Limited
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SUMMARY OF HALF-YEAR RESULTS

• Sales Revenue
• Gross Margin
• Gross Margin
• Operating Costs
• EBITDA
• Depreciation
• Interest
• Net Loss
• Abnormal Items
• Net Loss after Abnormals

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BALANCE SHEET
million

• Cash
• Fixed Assets
• Debt
• Net Equity

31 December 1999 60.9 134.8 - 221.9
30 June 1999 73.7 82.4 - 178.2
30 June 2000 20.1 174.2 - 215.2

• Initial cash equity in August 98 200 million
• Initial network build 1999 2000 300 million
• Underwritten 300 million seven year fully funded
  bank syndicated loan in place. 70 million
  interim loan drawn down
• All previous Spectrum questionable assets written
  off

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PERFORMANCE METRICS

• Key Performance Indicators - May 2000 AGM
• Complete Melbourne network link by end of June
  2000
• Building access - 325 by end December 2000
• EBITDA positive by Q3-Q4 2001

2000 1999 2400 1225 292
71 5m 1.7m 266 150
23 3

• Fibre deployed in service - kilometres
• Buildings accessed
• Building space coverage - square metres
• Staff numbers
• Points of interconnect

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POWERTEL - A NEW WORLD CARRIER
Sunshine Coast
Toowoomba
Brisbane
Gold Coast
Newcastle
Gosford
Penrith
Perth
Sydney
Adelaide
Wollongong
Ballarat
Canberra
Bendigo
Melbourne
Geelong
Mornington
PowerTel Network Off-Net Coverage
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BANDWIDTH DRIVERS
New World
Old World
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RelativeLoad
4
2
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000E
Year
Source ElectroniCast, BT Alex Brown Research
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NETWORK ECONOMICS
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PRICE ELASTICITY
Sydney-Melbourne Pricing Summary
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2 Mbps
64 Kbps
128 Kbps
512 Kbps
1024
4 Mbps
6 Mbps
8 Mbps
34 Mbps
45 Mbps
155
Kbps
Mbps
Source Telyste Pty Ltd, May 2000
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POWERTEL COMPETITIVE ADVANTAGE

• Infrastructure Ownership
• CBD Fibre
• Metropolitan Fibre
• Inter-City Fibre
• International Fibre Connectivity
• Building Access
• Last Inch Access to Customers
• Rapid Service Provisioning
• Value Add Products
• Cisco Powered Network
• Internet Protocol Enterprise Solutions
• Operating Support Systems
• Low Cost Network Operator

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POWERTEL STRATEGIC OVERVIEWNeil Verrall,
Director, Sales Marketing PowerTel Limited
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THE POWERTEL OFFERING

• High-speed broadband network connectivity
• Speed in delivery
• Scalability
• Flexibility
• Reliability
• Cost-efficiency
• Gateway to convergence

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SALES MARKETING

• Extension of reach through
• NETWORK PARTNERS
• Boeing Australia
• Soul Pattinson Telecommunications
• Ue Comm
• Energy Australia
• Cisco Systems
• Williams Communications

• POWERTEL
• Sales 50
• Marketing 18
• Customer Care 24
• Total 92

• Corporate segments
• Banking and finance
• Government
• Commercial
• Media Information Technology

• Wholesale segments
• Existing carriers
• Digital Subscriber Line
• (DSL) providers
• Internet Service Providers
• (ISPs)

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STRATEGIC INVESTMENT - GLOBAL
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PRODUCT TRANSITION

• PowerTel Product Development

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POWERTEL AS CHANGE AGENT

• Low cost operator
• Last inch access
• Superior data network
• Infrastructure ownership
• Bandwidth demand
• Solutions based

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POWERTEL TECHNICAL DIFFERENTIATORSRon Sinnes,
Director, Engineering PowerTel Limited
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Networking Made Simple

• PowerTel traffic engineers backbone and can
  provide statistics to traffic engineer customer
  access links
• Network evolution does not complicate network
  design
• Multi-Service is supported with IP QoS

• Customers traffic engineers network, specifying a
  complete matrix of bandwidth requirements
• Complexity evolves with the network
• Multi-Service Support is limited

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PowerTel Solution Example 1

• Network is enabled to differentiate required
  service parameters
• QoS specific VPNs manage traffic flows
• VPN membership can be site specific

Voice VPN
Data VPN
Video VPN
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PowerTel Solution Example 2

• Network is enabled to differentiate required
  service parameters
• One VPN with multiple grades of service
• Application Awareness at edge and core

Multi-Service VPN
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PowerTel Solution Example 3

• Latest Application support without licensing
  investment
• Value-added content, such as News Clip streaming,
  access to e-consortiums, application of the day

Web Content
Video Streaming
Business Application
Application Services
Content VPN
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CASE STUDY - BEFORE POWERTEL

• Business growth retarded
• Slow
• Poor voice links
• No Video Conferencing
• No Future

Previous WAN Infrastructure
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CASE STUDY - POWERTEL SOLUTION

• For similar s
• Massive increase in bandwidth
• Voice Integration
• Outsourced Routers
• Large savings on telephone calls
• Future proof

WAN Links
PVC 4
4Mbps
New PowerTel Infrastructure
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OUR NETWORK. YOUR SOLUTION